Letsbuyit.com shares were suspended on 29 December at its own request.This decision was taken after the company filed for bankruptcy protection and stopped taking customer orders on its websites until its future was clarified.
Letsbuyit.com is expected to meet with a court-appointed Dutch bankruptcy trustee today to review its options, one of which could be to terminate its operations.
The company needs a cash injection of £56.73m if it is to survive until 2003, when it is projected to start making profits. Shares in the company have fallen 88% since its IPO in July
According to Martin Coles, chief executive of Europe’s largest remaining standalone online retailer, the company was running out of money having spent £28m in the last five months.
Coles was reported in the Independent as saying: ‘Without the promise of future cash, it will be impossible to run the business. We have got a relatively short period of time to secure new funds.’
On Thursday last week Letsbuyit.com made an application in Holland, where its holding company is registered, to have its debt payment deferred.
It raised £39m when it went public in July, only half as much as it had planned for, due to a fall in tech shares. Currently, the company only has £11.34m in cash remaining following losses of £16.26m on sales of just £5.86m.
Letsbuyit.com has adopted a creative approach to selling online, with products reducing in price the higher the numbers of users that register to buy it. Letsbuyit.com has set up operations in 14 countries selling a wide range of products from sporting goods to electronic goods. It currently has 1.1 million registered users.
However the company’s pan-european strategy has been questioned as no offline retail models exists for it. Maziar Darvish, CE of Internet Business Group said: ‘It’s madness rolling out in that many countries altogether.’
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